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Samsung Branded Stores

In late January 2014, South Korean electronics giant Samsung took a leaf out of arch rival Apple's marketing book and announced it would open a swath of dedicated 'Experience Stores' across Europe. How successful are these branded stores likely to be?
Tough Act to Follow
Apple has been in the branded-store game for ten years. By January 2014 it had opened 432 stores across four continents. This includes 37 UK stores, although across Europe there are just 98 wholly owned outlets spread over eight countries. Apple stores are full of innovation. Every aspect was considered in minute detail, including space utilization, lighting, materials and colour schemes.
In fact, stores like the one in New York have become a visitor attraction in their own right. Apple product owners can receive advice, device health checks or geek-to-geek conversations at the Genius Bar. Customer queuing has been banished by staff-carried mobile pay-points. And stores often host training and workshop sessions. In total, Apple stores bring in a phenomenal $19bn (£11.5bn) in sales each year. A very tough act to follow indeed.

Not New
In reality it's not exactly a brand new direction for Samsung. It has around 1,400 Experience Stores in the US, although these are mainly kiosks inside Best Buy stores. And it has successfully tested the European strategy through the three Spanish stores it opened in 2013, plus its Westfield shopping center store in Stratford, London. The European plan is to open 60 dedicated, wholly owned, Samsung-brand stores across seven countries, including the UK, Ireland, Sweden, Spain, Portugal, Germany and the Netherlands.
Apple-Like
The similarity between a Samsung Experience Store and an Apple Store is striking, from layout and appearance right through to the way in which customers are treated. For example, the Samsung 'Smart Service' facility has more than a passing resemblance to an Apple Genius Bar. And there'll be Samsung Experience consultants on hand to guide advice and demonstrate its various hardware and software offerings. The gadgets on offer include smartphones, tablets, laptops and the latest wearable technology, most with Samsung customized operating systems and brand-specific software apps. And, no doubt, the sales floor will contain other items from Samsung's extensive products range, such as TVs and monitors.
Partnerships
For this European push, Samsung decided to select an existing player on the European high street, namely earphone Warehouse. Forming such a partnership helps Samsung speed up the store opening process, as it can rely on an existing local resource of sales- trained consultants. In addition, once the initial roll out of dedicated branded stores has completed, there's an opportunity to expend its presence further by integration with some of the existing Car phone Warehouse stores.
The carrot Samsung offered earphone Warehouse is a significant share of store profits - some reports suggesting up to 60%. As news of the deal filtered through the financial markets it appeared to be favorably received, with the earphone Warehouse stock price rising over 6% immediately after the official announcement. However, by early February it was clear earphone Warehouse wasn't the only partner in the mix. In a new announcement, Samsung said it would open 15 branded stored in the UK using a partnership with Phones 4u.
During the 2012 Olympics, Phones 4u operated pop-up Samsung stores. Scott Hooton, Phones 4u chief marketing officer, said, "The first 15 stores will showcase a full range of Samsung phones, computing accessories and wearable technology. We are already a leading retailer of Samsung phones and are thrilled to be further developing our strong relationship."
Try and Buy
Evidence from the Apple stores shows this kind of retail operation is an ideal way to showcase the ease of use and cloud integration features of today's feature-packed gadgets. Apple stores attract large crowds every single day, all eager to wander around the attractive environment to examine the enticing displays, try out the latest products or software and engage the attentive staff with all manner of questions. For many potential customers, the range of devices, operating systems and apps is a bewildering maze, one which often leads to purchase procrastination.
Yet this is where a branded store really scores. For instance, choosing between a 7", 8" or 10" tablet is much easier when you get the opportunity to hold and use each one in turn. In fact, with many of the latest handheld and wearable gadgets consumers are keen to discover how they look and feel, as opposed to how they operate, before making a decision.
Technology Awareness
Samsung aims to use these new stores to show off its unique hardware and software features. In a way it's rather ironic that in the age of ubiquitous web access, you still need people to demonstrate to other people the benefits of your products and patented technology. Without this opportunity, consumers might retain an unbalanced opinion of Apple versus Samsung technology.
For example, the Samsung Note series, with its advanced S-pen capabilities, doesn't have a direct competitor. So many potential customers are unaware of the attractions of stylus-centric interaction for note-taking and drawing. Plus the benefits of using Samsung's custom-designed user interface for the underlying Android operating system are far easier to demonstrate than explain.
A potential upshot of these new stores could be greater awareness among the general public of the Android operating system's capabilities.
Value of People
Yet this model only works when you have the right staff. Recruitment doesn't seem to be an issue for Apple. It can select from a large pool of candidates, eager to be associated with both the brand and the products. We can expect the new Samsung stores to attract the cream of the earphone Warehouse and Phones 4u staff. But the question remains whether these recruits will ultimately be classed in the same league as Apple staff. If they fall short of the mark and leave store customers unimpressed - or, even worse, confused - the whole concept will be at risk.
More to Come?
Will we see other technology brands moving onto the European high street? Google is one potential prospect. The $12.5bn acquisition of Motorola in 2011 seemed to indicate a move towards consumer products. However, last year's $2.6bn sale of the Motorola Home (TVs and set-top boxes) and the recent $2.9bn sale of the Motorola Mobility (smart phones) to Levono makes the branded store scenario seem a little less likely. Maybe Google did purchase Motorola just to acquire its 17,000 mobile phone and other technology patents after all. And what about Microsoft? A number of well-positioned stores might change consumers' opinions about the range of Microsoft Windows 8.1 smartphones, tablets and touch-screen laptops. And with so many people using Microsoft's operating system and applications, either at home or in the office, an 'expert advice' area would be a popular facility.